China's inflation eases ahead of Lunar New Year

The Associated Press

Consumer prices rose 2 percent over a year earlier, down from the previous month's 2.5 percent gain, the government reported. The decline came despite a 37 percent jump in vegetable prices.

The January decline was due in part to comparison with the same month last year, when food prices spiked up as families stocked up for Lunar New Year banquets. This year's holiday doesn't begin until this month.

Higher pressures for prices to rise have prompted some analysts to suggest Beijing will respond by tightening credit, possibly complicating efforts to support China's shaky economic recovery.

Economic growth ticked up in the final quarter of 2012 but analysts say a recovery could be vulnerable if trade declines or the government fails to support investment spending that is propping up the rebound.

Food prices have been pushed up by the coldest winter in seven years, which damaged vegetable crops. The government said vegetable prices in some areas rose as much as 74.6 percent in January compared with a year earlier.